Mezzanine Lenders – Stuyvesant Town-Peter Cooper Village Litigation
Herrick and co-counsel successfully represented junior lenders in litigation related to the foreclosure of Stuyvesant Town-Peter Cooper Village, Manhattan's largest housing complex, which our clients alleged was based on a flawed premise, designed to provide an unjust windfall of approximately $1 billion to the defendants at the expense of junior lenders. This litigation, fought primarily in New York state court, was ultimately settled in an agreement that resolved all claims between the parties and helped clear the way for a future sale of the complex.
All Claims Dismissed in Litigation Challenging $9 Million Sale of Brooklyn Apartment Building
Secured a ruling dismissing all claims against the insured buyers of a Brooklyn apartment building in litigation seeking to strip them of their interests in the property. The plaintiff launched a multi-pronged attack on the $9 million sale of the building, claiming the transaction had violated his right of first refusal, that the individual who had signed the deed transferring title to the property lacked capacity, and that the deed itself was a forgery. In its ruling, a New York state court granted our motion to dismiss in its entirety and cancelled the notice of pendency.
Real Estate Investor – Successful Prosecution of Breach of Contract of Sale Agreement
Achieved a significant victory on behalf of a major New York City real estate investor in a breach of contract dispute with the would-be-buyer of five of our client's multiple-dwelling residential properties, who breached a contract of sale between the parties by failing to fully pay the agreed upon down payment as required in the agreement. The court granted our motion for partial summary judgment, striking the defendant's affirmative defenses, denying the defendant's cross motion for leave to amend its answer to interpose counterclaims, and ordering the defendant to pay $850,000 in damages, plus interest, to our client.
Bridge Lender – Real Estate Debtor Bankruptcy
Represented the bridge lender in a single asset real estate debtor case in which Herrick successfully won default rate interest of 24% during the pendency of the debtor's chapter 11 case, where the non-default interest was 12% and the only default asserted was the filing of the debtor's bankruptcy case. Herrick also successfully defeated the debtor's reorganization plan that contemplated a cramdown of the client's mortgage debt, ultimately leading to a consensual chapter 11 plan in which the luxury high-rise condominium in Williamsburg securing the mortgage was transferred to our client.
Dispute with Former Property Manager – Allegations of Fraud and Self-Dealing
Represented the property owner of four valuable Manhattan buildings in an action filed in New York state court against our client's former property manager with damage claims in excess of $5 million. The dispute, which involved allegations of fraudulent and bad-faith conduct that included self-dealing, comingling of funds, and the misrepresentation of material information, was resolved favorably for the client following Herrick's successful opposition to motions to dismiss, strike allegations in the complaint, and for summary judgment.
Lender and Special Servicer – $126 Million Mortgage on Miami’s Shore Club Hotel
Represented the lender and mortgage servicer in litigation against a hotel developer filed in Nassau County Supreme Court and in the Appellate Division, Second Department. The underlying dispute involved an action filed by our clients in Florida seeking to foreclose the $126 million mortgage on the Shore Club Hotel in Miami, and the hotel developer's ultimately unsuccessful attempts to derail that action. Having slipped a purchase option into a hotel tenant's lease, which purported to convey to the tenant a right to purchase the mortgage loan at fair market value, the developer then "purchased" the option from the tenant and sought to enforce that option in the Florida foreclosure action. On the eve of an expected adverse ruling in Florida, the developer brought its claim to Nassau County, where the trial court granted a preliminary injunction, effectively preventing our clients from foreclosing the mortgage. We filed an appeal and obtained a reversal, resulting in the dismissal of the Nassau County action. Leave to appeal was denied by New York's Court of Appeals.
Real Estate Management Company – Precedent Setting Decision in Wage & Hour Action
Successful defense of a real estate management company and its principal sued by a former residential janitor and two alleged former laborers at New York City properties managed by our client. The plaintiffs claimed minimum wage and overtime violations under the Fair Labor Standards Act and New York Labor Law, as well as related common law claims. The court granted, in substantial part, our motion to dismiss, striking 9 of the plaintiffs’ 12 claims in one of the first decisions to interpret the minimum wage and overtime provisions under New York law and the Minimum Wage Order for the Building Service Industry as they relate to residential janitors.
Lender – Times Square Hotel Enforcement Action
Represented the lender of a $65 million loan to fund the acquisition of a Times Square area hotel following the alleged breach of a provision in the loan agreement requiring that a restaurant tenant servicing the hotel be opened to the public by a specific date. This litigation was ultimately settled favorably after hard fought litigation.
Property Buyers – Appellate Victory in Specific Performance Dispute
Secured a victory in the Superior Court of New Jersey, Appellate Division on behalf of the buyers of a multi-million dollar custom-built home whose specific performance claim against a contractor who had deviated from the contracted plans had been dismissed by the trial court. The appellate court reversed, directing the trial court to order specific performance with an escrow to be established at closing to cover any damages. Herrick continues to represent the clients in litigating their damage claims.
Commercial Real Estate Dispute – Right of First Refusal
Successful representation of the tenant of a Lakewood, NJ commercial property in litigation seeking injunctive relief and specific performance arising out of landlord's wrongful attempt to sell the property to a third party in a breach of the "right of first refusal" clause in the lease agreement between the parties. Herrick was able to secure an injunction blocking the sale, which cleared the way for our client to purchase the property, which it has done.
Veteran NYC Developer – Partnership Dispute
Successfully represented veteran New York City developer as plaintiff in litigation filed in New York state court arising out of a dispute with former business partners over interests in a certain major New York City real estate development project. Herrick was able to resolve the dispute quickly, negotiating a settlement agreement on favorable terms for our client, which avoided protracted litigation.
Retail Property Owner – Asbestos Remediation Litigation
Represented the owner of a Massachusetts retail property in a declaratory judgment action filed by the property's former owner following our client's demand that that the former owner pay the cost of remediating asbestos at the property. As an alternative to lengthy litigation, Herrick was able to engage the plaintiff in mediation which resulted in a very favorable settlement for our client.
Real Estate Investment Firm – Acquisition and Foreclosure of $60 Million Mortgage Loan
Advised a New Jersey-based investment firm with over 3.3 million square feet of real estate assets under ownership on the acquisition and foreclosure of a $60 million mortgage loan encumbering an office building located in White Plains, New York. The loan, already in default, was acquired out of a securitized trust. We proceeded to prosecute a pending foreclosure action to judgment, and then represented the client as the successful bidder at the foreclosure sale. Herrick continues to represent the client in connection with various disputes at the property.
Verizon Wireless – Appellate Victory in Cell Phone Tower Zoning Dispute
Represented Verizon Wireless in the company's successful appeal of a New Jersey township's denial of a variance allowing for the construction of a 140-foot cell tower. The victory followed a more than seven year effort to obtain approval for the project which aimed to provide service in a "dead zone" affecting the Princeton area. In a unanimous decision, the Superior Court of New Jersey, Appellate Division reversed a lower court's ruling, agreed with our argument that the township's zoning board had acted improperly and ordered the board to reconsider the application.
Majority Shareholder – Successful Litigation for Control of Midtown Manhattan Property
Successful representation of a majority shareholder in a dispute with a minority stakeholder over control of a corporation whose sole asset was a valuable Manhattan property. Through litigation filed in New York state court, Herrick was able to secure the client control over a building located on prime midtown Manhattan real estate.
Building Materials Manufacturer – Product Liability Disputes
Representing major manufacturer of commercial and residential roofing in multiple warranty claims.
National Department Store Chain – Breach of Contract Dispute with Real Estate Brokerage Company
Defense of a national retail chain in litigation filed by a real estate brokerage company seeking damages related to an alleged breach of contract and other claims.
Condominium Sponsor – Construction Defect Dispute with Construction Manager and Contractors
Representing the sponsor of a Brooklyn, NY condominium development in litigation with the project's construction manager and contractors arising from claims by the condominium's board of managers that work in accordance with an offering plan under which the condominium's units were sold was not adequately performed.
New York State Association for Affordable Housing – Challenge to Local Law 44
Representing the New York State Association for Affordable Housing and individual developers in litigation seeking to invalidate Local Law 44 - which requires any developer receiving city funding to submit quarterly wage reports - as unconstitutional, pre-empted by New York state law, and imposing an unreasonable economic burden on small businesses competing for affordable housing work.
Insurance Coverage Dispute – Commercial Property Insurance
Successfully represented an insurer in a dispute with a building owner over whether coverage existed under its commercial property insurance policy for over $1 million in claimed property damage caused by an underground water supply line rupture.
Private School – Defense of General Contractor’s Breach of Contract Claims
Defending a private school and affiliated religious institution in litigation with a general contractor who formerly oversaw a significant renovation at the school’s Upper East Side facility during which a fire occurred, resulting in millions of dollars in damages. In addition to defending the client from breach of contract counterclaims in ongoing litigation alleging that the fire was caused by the contractor’s negligence, Herrick successfully argued that a separate breach of contract action filed by the contractor was duplicative and harassing, securing an order from the bench dismissing the contractor’s complaint in its entirety.
Title Insurance Company and Property Owner – Restrictive Covenant Dispute
Representing the owner of a vacant parcel of land in Westchester County, New York in a dispute with neighboring property owners over our client's plans to construct an affordable housing complex. Relying on a century-old restrictive covenant contained in a prior deed which prohibited development of a "tenement or flat-house" on the property, the neighboring property owners are attempting to block our client's planned development. Herrick is defending the owner's right to develop the property, arguing that the planned modern day apartment complex is not a "tenement or flat-house" within the meaning of the restrictive covenant, and that the restrictive covenant is unenforceable.
Real Estate Litigation – Breach of Debt Obligations and Fraudulent Conveyance
Representation of real estate developers in litigation with a former investor alleged to have induced our clients into arranging and guaranteeing a loan based on false financial statements. After defaulting on the loan, the investor is alleged to have fraudulently transferred assets in an attempt to avoid liability. This litigation was ultimately settled on favorable terms to our client and voluntarily dismissed.
Construction Management Company – Wrongful Termination
Representation of a construction management company in a dispute with NYU Hospitals Center regarding the termination of a multi-million dollar renovation contract. After a trial in Federal Bankruptcy Court, the court held in favor of our client on all counts, entitling them to payment of its outstanding requisitions and dismissal of all claims against them.
Real Estate Owner – BSA Building Permit Challenge
Represented a Brooklyn real estate owner before the New York City Board of Standards and Appeals in connection with a successful effort to prevent adverse parties from obtaining building permits.
Major Publicly-Owned REIT – Settlement with Tenant
Represented a major, publicly-owned REIT in reaching a favorable settlement with a prospective 400,000-sq.-ft. tenant of a proposed major office building, arising from the REIT's decision to suspend development due to condition of the local real estate market.
Title Insurance Company – Class Action Defense
Representation of a title insurance company in a class action alleging overcharges on premiums for policies sold to consumers in New Jersey. We settled—on terms favorable to our client—early enough in negotiations to minimize our client's legal fees.
Irish Bank – Foreclosure on Battery Park City Building
Represented an Irish bank in a complex foreclosure of a 302-unit leasehold condominium located at 225 Rector Place in New York City. When the developer defaulted on a $165 million acquisition and construction loan, we worked with the lender to foreclose and to fend off a lender liability lawsuit.
REIT – Office Building Settlement
Represented a major, publicly-owned REIT in obtaining a favorable settlement in a multi-million dollar litigation related to cleaning and maintenance services at four large office buildings in New York City.
Title Insurance Companies – Class Action Defense
Representation of two title insurance companies in two class actions alleging overcharges on premiums for policies sold to consumers in New York. After extensive litigation, we settled on terms favorable to our clients.
Real Estate Development Company – Land Purchase Dispute
Representation of real estate development company in an appeal arising from its $3 million purchase and development of 7.5 acres of land from Hebrew Huntington Congregation. A faction of the congregation challenged the court's order that permitted our client to purchase the land under the Religious Corporations Law. The Second Department upheld the order and dismissed the appeal as moot, recognizing that our client was a bona fide good faith purchaser.
Las Vegas Conference Center Real Estate Investors – Arbitration Victory
Represented one of three investor groups in an existing five million square foot conference and exhibit center in Las Vegas in a seven-week, three-panel arbitration over each investor group's rights and ownership in the project. The panel found that all parties to the transaction, except Herrick's clients, had engaged in wrongful conduct. The conference center, at its completion, will cost more than $1 billion to build and is planned to expand to 12 million square feet.
New York Residential Brokerage Company – Successful Mediation
Representation of a prominent New York residential brokerage company in a successful mediation against a civil rights suit alleging conspiracy with building owners to steer families with children away from apartments.
Real Estate Investment Management Companies – Construction Litigation
Defended a large industrial real estate investing entity and its investment management firm in a $90 million construction defect litigation with an industrial tenant in New Jersey. We succeeded in getting most of the plaintiff’s case dismissed on summary judgment, and then settled the rest of the dispute case before trial. The settlement included the plaintiff turning over escrowed back rent to our client and entering into a favorable lease extension.
Real Estate Company – Management Agreement Litigation
Represented a real estate services company in a $20 million lawsuit brought by former customers. The former customers, owners of two large New York City office buildings, claimed that our client, which managed the buildings, had committed numerous acts of wrongdoing over several years, including breaching contracts, fraud, and breaching fiduciary duties. The customers sought to recover all the fees they’d paid our client over the years under New York’s “faithless servant” doctrine. The District Court granted our summary judgment motion, dismissing all of the higher-damage tort and equity claims, and we then settled the remaining breach of contract claim. The former customers lost their appeal to the Second Circuit Court of Appeals, bringing the case to a successful conclusion for our client.
Red Rock Services Trustee – Appellate Victory in Bankruptcy Litigation
Herrick secured an appellate victory for the chapter 7 trustee of bankrupt demolition subcontractor Red Rock Services, affirming a judgment of almost $1 million won in a bankruptcy adversary proceeding in the Eastern District of Pennsylvania. On behalf of the trustee, Herrick sued a general contractor for breach of its obligations under subcontracts with Red Rock in a pair of multimillion dollar construction projects in Baltimore and Boston. After eight days of trial, the trustee was awarded a judgment of almost $1 million, including attorneys' fees. Herrick defended the judgment on appeal to the district court, where it was affirmed, and went on to successfully defend the ruling on the defendant’s second appeal to the Third Circuit, which affirmed the judgments of the bankruptcy court and district court in their entirety.
Robert W. Seavey – Victory in $500 Million RICO Case
Representation of Robert W. Seavey, real estate developer and owner, in obtaining a U.S. District Court summary judgment dismissing a $500 million RICO case. The suit also named members of his family, the management company and accounting firm. The court found that the plaintiffs and their forensic accounting firm had failed to find any evidence supporting their claims. The decision appears to be the first New York decision that found that the federal bank fraud statute cannot serve as a predicate act in a RICO case when the plaintiff is not a financial institution. All state court claims were dismissed.
Appellate Victory for Special Servicer
Represented the special servicer for a lender in a suit against a borrower and three individual guarantors after the borrower procured subordinate financing in violation of a non-recourse carve-out provision. In a case of first impression, the Superior Court of New Jersey, Appellate Division enforced the non-recourse carve-out provision and imputed personal liability to the borrower and guarantors. It concluded that the disputed clause fixes liability rather than damages and, therefore, does not constitute an unenforceable penalty as the borrower had argued. The Appellate Division also held that the borrower's efforts to “cure” the triggering event did not vitiate personal liability. As a result, the lender properly obtained a $5 million+ deficiency judgment against the borrower and guarantors.
Real Estate Investment Company – Five-State Residential Portfolio Acquisition and Financing
Represented a major real estate investment and service company in its acquisition and financing of a five-state, 14-property portfolio of residential rental and condominium apartment complexes. The portfolio was financed through 14 first mortgage loans and 12 mezzanine loans, culminating in a four-day closing.
Asphalt Contractor – Post 9/11 Reconstruction Bidding Dispute
Representation of an asphalt contractor in challenging the bidding procedure used by New York City and utility companies to award significant street reconstruction work near the World Trade Center site after the September 11th terrorist attacks. We obtained several temporary stays on the grounds that the bidding procedure violated public procurement laws. The city cancelled its invitation to bid and used a different procurement procedure.
Subsidized Housing Project Sponsor – Market Rate Conversion
Represented a sponsor in settling a litigation involving the sponsor's effort to convert one of New York City's largest Mitchell-Lama subsidized housing projects (1,200 units on Manhattan's Upper East Side) to market rate housing. The settlement involved the creation of entirely new subsidy programs by the city and by the sponsor, and an approximately $550 million condominium conversion.
Financial Media Company – Lease Dispute
Represented a multi-billion dollar financial media company in a lease dispute involving approximately 180,000 sq. ft. of office space.
Title Insurer – Frivolous Claim Defense
Defended a title insurer in an action by a property owner seeking title insurance coverage. The court found the owner's damages to be attributable to its own actions, and impressed sanctions against the owner and its counsel, which included attorneys' fees, for prosecuting frivolous litigation.
General Contractor – Lien Foreclosure
Representation of a general contractor in a lien foreclosure action against the Metropolitan Transit Authority and the owner of 2 Broadway, New York, the MTA's headquarters. After a trial on the merits, the New York State Supreme Court awarded our client damages in excess of $1 million.
Jury Dismisses Subcontractor’s Discrimination and Breach of Contract Claims
Representation of a real estate developer and general contractor in an action by a minority subcontractor pursuing multi-million dollar discrimination and breach of contract claims. All claims were dismissed after a two week jury trial in the United States District Court for the Southern District of New York.
Joint Venture Partner – $40 Million Construction Agreement Dispute
Represented a joint venture in connection with disputes arising out of DEP construction agreements worth in excess of $40 million.
Real Estate Board of New York – Mitchell-Lama Litigation
Represented the Real Estate board of New York in its successful lawsuit against the New York City Council to overturn Local Law 79. The law required owners of Mitchell-Lama housing and housing subsidized by certain federal programs to give a right of first refusal to purchase their projects to tenants, pursuant to an ambiguous and burdensome process. The Court found that the law was preempted by federal and state housing laws, and enjoined the City from enforcing it.
Title Insurer – Fraud and Defalcation
Representation of a title insurance company in recovering $8 million in losses incurred by defalcation and fraud of a title agent.
Real Estate Management Company – Tax Protection Dispute
Represented a real estate management company in defending against a multi-million dollar claim that it breached a tax protection agreement with a property owner that contributed an office building to the partnership. The property owner claimed that the tax protection agreement was triggered by the real estate company's merger with another company.